SEGMENT REPORTING

6 Months Ended

May 01, 2011

SEGMENT REPORTING

SEGMENT REPORTING

NOTE L SEGMENT REPORTING

The Company develops, processes, and distributes a wide array of food products in a variety of markets.  The Company reports its results in the following five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and All Other.

The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market.  This segment also includes the results from the Company’s MegaMex Foods, LLC (MegaMex) joint venture.

The Refrigerated Foods segment includes the Hormel Refrigerated operating segment and the Affiliated Business Units.  This segment consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers.  The Affiliated Business Units include the Farmer John, Burke Corporation, Dan’s Prize, Saag’s Products, Inc., and Precept Foods businesses.  Precept Foods, LLC, is a 50.01 percent owned joint venture between Hormel Foods Corporation and Cargill Meat Solutions Corporation, a wholly-owned subsidiary of Cargill, Incorporated.

The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and fresh product customers.

The Specialty Foods segment includes the Diamond Crystal Brands, Century Foods International, and Hormel Specialty Products operating segments.  This segment consists of the packaging and sale of various sugar and sugar substitute products, salt and pepper products, liquid portion products, dessert mixes, ready-to-drink products, sports nutrition products, gelatin products, and private label canned meats to retail and foodservice customers.  This segment also includes the processing, marketing, and sale of nutritional food products and supplements to hospitals, nursing homes, and other marketers of nutritional products.

The All Other segment includes the Hormel Foods International operating segment, which manufactures, markets, and sells Company products internationally.  This segment also includes the results from the Company’s international joint ventures and miscellaneous corporate sales.

Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations.  The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance.  The Company also retains various other income and unallocated expenses at corporate.  Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded.  These items are included below as net interest and investment expense (income), general corporate expense, and noncontrolling interest when reconciling to earnings before income taxes.

Sales and operating profits for each of the Company’s reportable segments and reconciliation to earnings before income taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

	Three Months Ended						Six Months Ended
	May 1, 2011			April 25, 2010			May 1, 2011			April 25, 2010
(in thousands)
Sales to Unaffiliated Customers
Grocery Products	$	260,273		$	256,665		$	537,172		$	518,309
Refrigerated Foods	1,040,624			893,470			2,051,326			1,785,772
Jennie-O Turkey Store	365,953			292,551			730,470			612,502
Specialty Foods	205,001			196,934			396,346			383,876
All Other	87,190			60,162			165,285			126,770
Total	$	1,959,041		$	1,699,782		$	3,880,599		$	3,427,229
Intersegment Sales
Grocery Products	$	0		$	0		$	0		$	0
Refrigerated Foods	3,198			1,747			5,452			3,810
Jennie-O Turkey Store	33,885			26,982			61,143			48,307
Specialty Foods	40			35			82			54
All Other	0			0			0			0
Total	$	37,123		$	28,764		$	66,677		$	52,171
Intersegment elimination	(37,123		)	(28,764		)	(66,677		)	(52,171		)
Total	$	0		$	0		$	0		$	0
Net Sales
Grocery Products	$	260,273		$	256,665		$	537,172		$	518,309
Refrigerated Foods	1,043,822			895,217			2,056,778			1,789,582
Jennie-O Turkey Store	399,838			319,533			791,613			660,809
Specialty Foods	205,041			196,969			396,428			383,930
All Other	87,190			60,162			165,285			126,770
Intersegment elimination	(37,123		)	(28,764		)	(66,677		)	(52,171		)
Total	$	1,959,041		$	1,699,782		$	3,880,599		$	3,427,229
Segment Operating Profit
Grocery Products	$	39,048		$	33,022		$	87,610		$	87,192
Refrigerated Foods	70,250			55,523			166,384			125,711
Jennie-O Turkey Store	46,703			32,169			120,528			65,436
Specialty Foods	19,164			21,508			36,442			41,138
All Other	8,444			4,133			18,437			11,855
Total segment operating profit	$	183,609		$	146,355		$	429,401		$	331,332
Net interest and investment expense (income)	5,215			5,151			11,353			11,269
General corporate expense	11,969			9,391			23,221			19,754
Noncontrolling interest	1,123			673			2,332			1,735
Earnings before income taxes	$	167,548		$	132,486		$	397,159		$	302,044